Enduring Ado About Oil

With the new estimates on oil gushing into the gulf, currently at 4300 to 24,300 barrels a day, more economic impact studies are being released on the BP Deepwater Horizon disaster. Spillonomics estimates currently range from $29 billion to over $70 billion in direct costs for the spill and clean up. A study on the spill's economic impact on Florida estimates losses at $11 billion and 195,000 lost jobs. There are 2.8 million jobs associated with tourism alone in the gulf region. The fishing industry in Louisiana is estimated at $2.4 billion.

Earth Economics estimates the Mississippi Delta to be worth $330 billion and $1.3 trillion and provides an economic annual benefit of $12-$47 billion per year.

There is now a residential real estate estimate of a 10% decrease in gulf coast property values as a result of the spill. These losses alone are estimated at $4.3 billion dollars.

Meanwhile the U.S. coast guard is giving BP a 48 hour moratorium to increase oil capture capacity. I'm not sure how one gets a ship to move faster in water, but needless to say there is politics and then there is engineering, logistics and safety. You hang in there engineers and geeks. We get how hard this is through spillcam.

Below is a Dylan Ratigan video clip which shows just how tied in BP stock is to pensions and retirement accounts, otherwise known as TBTF 2.0.

Below is the cliff of BP's stock price, having lost $80 billion in value. BP's last quarterly profits were $6 billion.

Mexico is now planning on suing BP for damages. Forget there is another entire country out there in the gulf? In the United States there are already 130 lawsuits filed in connection with the oil spill.

The 1990 Oil pollution act costs $1000 per barrel spilled but $3000 per barrel is the company responsible is found negligent. These fines are currently capped at $75 million but there is a bill in the House of Representatives to repeal the cap on these fines. Of course our sociopathic Wall Street is busy adding up the tab, banking on BP reducing their actual costs of course, and issuing a screaming buy on the stock.

The Obama administration wants a $20 billion dollar escrow fund from BP, which sent it's shares further in the tank. The Oil Drum has some additional cost calculations from the ban on deepsea offshore oil drilling.

Roughly 33% of nation’s domestically produced oil comes from the Gulf of Mexico, and 10% of the nation’s natural gas.

80% of the Gulf’s oil, and 45% of its natural gas comes from operations in more than 1000 feet of water – the deepwater (2009 data).

Suspension of operations means roughly 33 floating drilling rigs – typically leased for hundreds of thousands of dollars per day – will be idled for six months or longer.

$250,000 to $500,000 per day, per rig – results in roughly $8,250,000 to $16,500,000 per day in costs for idle rigs;
Secondary impacts include:
• Supply boats – 2 boats per rig with day rates of $15,000/day per boat - $30,000/day for 33 rigs – nearly $1 million/day
• Impacts to other supplies and related support services (i.e., welders, divers, caterers, transportation, etc.)

Jobs –

Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts
Each E&P job supports 4 other positions

Therefore, 800 to 1400 jobs per idle rig platform are at risk
Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month – per platform.
Wages lost could be over $165 to $330 million/month for all 33 platforms

On the other hand, another disaster is way more costly than the above.

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It's a large pdf, here, and there is a mention of a lot of risks. It's clear they are at least trying to prepare for a hurricane, which frankly sounds more prudent than simply trying to get politicians off of their backs immediately. I hope NOAA is completely wrong, but they predicted a huge number of hurricanes.

They are also putting pressure readings and sensors into the cap and it's clear watching spillcam this is yet another implementation bitch, but they clearly need that.

Engineers are wondering why they didn't plan for more relief wells. Those puppies cost $100 million each to drill.

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They are going to try to pump up additional oil/gas temporarily through a choke line attached to the damaged BOP to increase the flow.

hmmmm, that sounds scary. There are so many variables and while some bloggers made a huge deal of ruptured well disks, which I noted a long time ago, why people assume everything down there is known, stable, just find and dandy is ridiculous. The damn thing blew up, the damn 5 story BOP failed. it's damaged, there is something wrong with this and nobody even knows what that is.

Again, this is not to say BP is not evil, of course they are, but the engineering of this, from which all things flow, is nasty and having politicians or even management tell engineers what to do, can lead to disaster. Think NASA Challenger and O-rings.

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But the fundamental point with BP, and the vast majority of other companies, is exactly WHEN has engineering had any input into anything?????

From BP's ripe history, it would appear very little to never. A union shop, with sound engineers running things, would have had multiple contingency plans in place in such circumstances, as well as have taken pressure readings from the get-go.

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Considering how much of the world, from national security to billions in profits is completely dependent upon Science and Technology, this is a fundamental issue of these people trying to make money off of engineers all the while screwing them over not only in terms of money but in terms of power.

China, on their economic policy committee, almost all of them have an engineering background....so while the U.S. is stuck on stupid, flaying their arms around on a host of things, China is busy engineering an economic global takeover.

I just read the latest which will come out in the hearing. BP is so negligent, so beyond the pale stupid, just ignoring physics and technical realities. They blew up those guys, bottom line, plus all of this was so avoidable and that's with the technology they had, not even what they should have.

But this goes to a host of things. Stupid crap which just now the U.S. is figuring it out....which I wrote up so many times...uh, sending your R&D in engineering overseas will guarantee sabotage and industrial espionage..lo, behold, they are finding all sorts of code bombs, worms etc. in various COTS hardware components which are now made overseas.

Duh. It's not just BP, this is rampant.

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BP took measures to cut costs in the weeks before the catastrophic blowout in the Gulf of Mexico as it dealt with one problem after another, prompting a BP engineer to describe the doomed rig as a "nightmare well," according to internal documents released Monday.

The comment by BP engineer Brian Morel came in an e-mail April 14, six days before the Deepwater Horizon rig explosion that killed 11 people and has sent tens of millions of gallons of oil into the Gulf in the nation's worst environmental disaster.

But I disagree with you --- they've gotten it all figured out in this country.

Look at Richard Clarke, the former National Security Director for the Clinton Administration (when they transferred the most sensitive and classified military technology to China) and the Bush Administration (when they transferred the most sensitive and classified military technology to China).

Beginning to see a pattern here?? And, Clarke than writes a book complaining about (the obvious?) this, while claiming the very same corporations -- who offshored the technology and jobs to China -- are also worried about Internet security and the Chinese.

What's wrong with this picture?

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ya know the chips on the passports supposedly to help with "tamper proof". These idiots awarded the contract to an unsecure plant in Thailand. They claimed no one in the U.S. could do it. That is B.S. There are all sorts of FABS around the U.S., many closed down. Oh gee, they might have had to retool but I sincerely doubt no U.S. company bid on that or they couldn't dig out a U.S. company.

Just beyond pathetic!

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US Government finally figured out the 2007 ChiCom hack. It was alleged to be an upload from a USB flash from a sneeker network inside the Pentagon.Every major agency was compromised. ChiComs must have found out how many stooges they are dealing with. Then there was the spectacle of US Commerce Guttierez gettingt his laptop hacked while on a trade visit to Beijing.

Next comes the electric cars which will upload all their charging data into
the electric grid. GM will use OnStar Nissan will share this probably. So what happens when many of the chips or subsystems come from our friendly neighbor in the East? Chinese Electrics cars will upload their data, using their algorithms on their chips. Can you think of a better way to stage a Trojan? Warren Buffet is the biggest cheerleader for China's Electric vehicle.

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This is why politicians and pundits should NOT control trying to stop an oil disaster. The press release is lightning caused the fire but the reality is they are sitting in a sea of volatile oil, on top of a well that originally blew up, they are burning off massive amounts of gas on these ships and the area has extreme ship traffic.

They supposedly have it out but this is scaring me to death. What do they not get that the original blow out was due to bypassing safety due to pressures "from above".

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What's good for the Goose should be good for the Gander. We have Congress telling oil executives as well as bank executives to commit suicide. It's happened twice now. I'm sure the response is "not without my bonus"!

But it begs the question, why isn't Congress being asked to do the same thing? They have royally screwed this country over and over again, so how come they are not asking themselves, along with corporate executives to "fall on their swords".

Just absolutely beyond the pale, what's wrong with these people. Yet when it comes to bonuses, you can bet those won't be stopped.

BP is downgraded to one step above junk. There is now a lot of talk about BP bankruptcy. I would not be surprised for it would protect them from creditors.

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Posters on the Oil Drum tried to discredit the estimate of the Purdue Professor who said it was 70,000 barrels a day saying that size well does not exist in the GoM.

Even now there is an effort there to say the flow cannot be that high. Funny a couple of posters are saying that their eyes say its not that high. Of course when someone says the flow is still tremendous based on what someone sees coming out still the answer is that you cannot go by what you see.

They are losing credibility there by the hour.

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at least it's technical. I'm not sure. I went and read about various wells and that is one hell of a gusher even at 100,000 barrels in comparison to most.

I never did find the publish max capacity, before "blow out" of that well.

But I do believe the erosion analysis and an expect also said the flow rate is not static. I did see other experts also say it isn't a constant, static, especially with damage erosion and the "new" of the well because the pressure changes.

Eyeballing it the flow has changed but obviously, looking at a 2D image doesn't say much, but it sure seems to be more intense, after the cap.

I really fear the well casing is collapsing.

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I just love these friggin' gambling chips. The credit default swaps on BP are now at 35% probability of a total default. That's just great. Now who is gonna make money when BP goes down? It's not the U.S. or the gulf region.

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